Coal licence a 'goldmine' for union boss: ICAC

A corruption inquiry has heard the awarding of a mining licence in the Hunter Valley was a financial disaster for the people of NSW and a goldmine for a former union boss and his associates.

Opening Operation Acacia, ICAC Commissioner David Ipp said the inquiry was investigating a licence former mining minister Ian Macdonald awarded to Doyles Creek Mining in 2008.

He said the inquiry was looking at how the tender process was handled and the nature of any profits made by shareholders of NuCoal Resources - the proprietor of Doyles Creek Mining.

Mr Ipp said the inquiry would examine Mr Macdonald's relationship with former CFMEU national secretary John Maitland, who was chairman of Doyles Creek Mining and a shareholder in NuCoal.

It was a financial disaster for the people of New South Wales and a goldmine for John Maitland and his associates.

Counsel-Assisting Peter Braham SC

But he said its scope had been "widened" to look at allegations Mr Macdonald, Mr Maitland and others tried to cover up benefits and favours associated with the licence.

Mr Ipp said he would consider whether Mr Macdonald acted "recklessly or negligently" or in breach of his duties as a minister of the Crown.

The ICAC is also considering possible recommendations to the State Government about mining licences, and if the Government should start legal proceedings against any individual or company in relation to the Doyles Creek licence.

In his opening address, Counsel-Assisting Peter Braham SC said the mining boom in Australia had brought a lot of people great wealth and that, as Mr Macdonald said himself during Operation Jasper, exploration licences at the time were regarded as "hot property".

Mr Braham said Mr Macdonald all but handed the licence to the group and the process he used was "astounding".

The counsel-assisting said Mr Maitland outlaid about $165,000 to acquire shares in NuCoal Resources, but within three years of the grant his investment was worth $15 million.

He said the entrepreneurs who benefitted from the licence - which was announced at Christmas time - were no doubt laughing all the way to the bank.

A number of Labor MPs are expected to be among the 60 or so witnesses to be called when the inquiry begins hearing evidence on Wednesday.

They include Luke Foley, Senator Doug Cameron, Anthony Albanese and former Labor politicians, but there is no allegation of wrongdoing against them.

Operation Acacia follows the long-running Operation Jasper investigation into the Mount Penny licence issued by Mr Macdonald in the same area.

That inquiry heard allegations Mr Macdonald rigged a 2008 tender process for a coal licence to benefit former colleague Eddie Obeid, whose family stood to make up to $100 million from mining deals.

Mr Ipp will hand down his findings into both inquiries at the end of July.

Reputation

The Construction Forestry Mining and Energy Union (CFMEU) has already moved to distance itself from the allegations before the ICAC.

In a statement, the union said it refused to back Mr Maitland's proposal for a training mine at Doyles Creek.

"While Mr Maitland certainly has a strong record in mine training and mine safety, we didn't believe the Doyles Creek proposal stood up to any rigorous examination in terms of contribution to training in the industry or transparency of process," general secretary Andrew Vickers said in a statement.

"We were not willing to put the union's reputation on the line to support it."

The union said Mr Maitland retired two years before the Doyles Creek licence was granted.